Green Energy Studies: Consulting, or Advertising?

Wind and solar aren’t remotely competitive with traditional fossil fuels and cannot replace them. They would scarcely exist if it weren’t for massive federal subsidies, and state laws establishing quotas for renewable energy. Neither are good at reducing carbon dioxide emissions (CO2).  I wrote a book about wind and solar called Dumb Energy and found them to be mainly political creations. They are a complete waste of money kept alive by political action. Most of the things you have heard from the wind and solar propaganda machine is wrong. 

But they have their champions. Deloitte is one of the Big Four accounting and consulting firms with about 300,000 employees. Lazard is a much smaller firm with about 3,000 employees. Both of these firms cultivate a reputation for advising clients on complex subjects. That includes consulting in the field of renewable energy – often wind or solar electricity.

Deloitte publishes academic-style papers touting the virtues of renewable energy. Lazard published a widely quoted study purporting to show the unsubsidized cost of wind and solar energy. These studies pretend to be objective but are actually promotional material for their renewable energy clients. Of course, it would be unfair to expect these firms to pan their clients’ products. Neither is going to suggest that their client’s wind or solar is dumb energy any more than these firms' divisions that consult with the fossil fuel industry make a point of claiming that fossil fuels will destroy the earth’s climate.

Yet they want to appear to be serious advisors, not advertising agencies. If they publish studies that pretend to be serious but are actually filled with errors and unsubstantiated promotional statements, they will damage their reputations and mislead the public that reads such studies. These 'disguised advertising' studies are often used to lobby our legislators for more renewable energy subsidies and quotas. In my opinion, Deloitte and Lazard have compromised their reputations for money. Of course, cynics will say: "What do you expect?"

Lazard’s study of the unsubsidized cost of renewable energy is fake because they fail to show that costs of these fuels do not strip out two of the three principal subsidies of wind and solar. The three subsidies are direct federal subsidies, tax equity financing, and state quotas for renewable energy. By pretending that the second and third subsidies are not subsidies, they make wind and solar seem much less expensive than they really are. For a sophisticated consulting firm, this is serious error.

In Deloitte’s study, Global Renewable Energy Trends, the fakery is extensive. They claim that renewables (solar and wind) are reaching price and performance parity compared to traditional sources of electricity. The truth is that wind and solar are expensive and heavily subsidized. Compared to fossil fuels, either wind or solar is about seventy five percent, and more, subsidized.

The illustration below shows the cost of solar electricity from eleven independent power producers as purchased by NV Energy, the main Nevada utility.

Nevada, being a desert, has excellent sunshine. The blue bar shows the contract price of the electricity per megawatt hour. The orange bar is an implicit subsidy created by state quotas for renewable energy that result in long term power purchase agreements effectively reducing the required rate of return for a producer. The grey bar represents the federal subsidies, a direct subsidy and the so-called tax equity subsidy created by favorable depreciation for renewable energy plants. These costs are compared to the alternative of generating electricity by burning natural gas in existing plants. Natural gas electricity from existing plants costs, marginally, about $25 per megawatt hour. The existing plants cannot be closed because they are needed when the solar energy is not working, for example, in the evening, or when it is cloudy.

Deloitte outrageously claims that wind and solar help balance the electric grid. But it is widely known that wind and solar have destabilizing effects on the grid. How can power that is generated according to the vagaries of the wind and sun not create such difficulties? In California, where there is substantial solar, they have the duck curve problem. When the sun sets, fossil fuel plants have to ramp up output very rapidly, creating a curve resembling a duck’s back. The graph shows the output of the fossil fuel plants that back up the solar plants.

Fossil fuel output drops drastically in the middle of the day when solar output is strong and then must ramp rapidly as solar dies late in the day at the same time overall demand for electricity is peaking. Fossil fuel plants have difficulty in quickly ramping up output. The duck curve problem is worst in the spring when solar is strong but air conditioning load is still moderate. In mid-summer, air conditioning can absorb some of the excess solar generation.

Wind power is very volatile. The output of a wind turbine varies as the cube of the wind speed. A 10% percent change in wind speed will create a 30% change in power output.

In Texas, a state with massive wind power, large excursions of wind output can take place in a few hours. Fossil fuel backup plants have to scramble to keep the grid balanced. The Texas wind output can quickly shift by 5,000 megawatts, the amount of power that five large fossil fuel generating plants can produce.

Both wind and solar are seasonal. Solar power drops drastically in winter when the days are shorter and the sun is lower in the sky. Certain times of the year have more clouds than others. Wind power seasonality varies according to the local weather but is often present.

The crippling problem shared by wind and solar is intermittency. Deloitte claims that wind and solar become “more dispatchable” if storage is added. The idea of storage is that when wind or solar is strong, electricity can be stored in lithium batteries and then recovered when wind or solar is weak. 'Dispatchable' means that the grid operators can direct a plant to generate electricity. This can’t be done with wind and solar because sometimes wind or sun is missing. “More dispatchable,” like a little bit pregnant, is not a meaningful concept. In fact, wind and solar are not dispatched. The grid makes an effort to accommodate all the wind or solar electricity that arrives by adjusting the fossil fuel plants that provide backup power. Adding massive batteries to wind or solar installations is quite futile. Batteries big enough to smoothe out wind power for a year are extremely expensive and would multiply the cost of electricity by around a factor of ten. An added feature is that the batteries wear out after about five years.

Any legislator or reporter who is presented with a study written by a consulting firm with renewable energy clients should recognize that a conflict of interest is present. Institutions that make claims of expert knowledge and which are filled with highly educated experts are routinely corrupted by money. Universities and other scientific institutions often promote weak theories of catastrophe, such as global warming, incentivized by the resulting financial rewards. The Environmental Protection Agency, protecting a major program, promotes mitigation of radon (a naturally occurring radioactive gas) based on a weak theory that environmental radon causes lung cancer. Studies from such sources should be ignored. 

 

Norman Rogers writes often about energy. He has websites: nevadasolarscam.com and climateviews.com

Photo illustration by Monica Showalter, with use of Norman Rogers' DOE duck curve graph and public domain source.

Wind and solar aren’t remotely competitive with traditional fossil fuels and cannot replace them. They would scarcely exist if it weren’t for massive federal subsidies, and state laws establishing quotas for renewable energy. Neither are good at reducing carbon dioxide emissions (CO2).  I wrote a book about wind and solar called Dumb Energy and found them to be mainly political creations. They are a complete waste of money kept alive by political action. Most of the things you have heard from the wind and solar propaganda machine is wrong. 

But they have their champions. Deloitte is one of the Big Four accounting and consulting firms with about 300,000 employees. Lazard is a much smaller firm with about 3,000 employees. Both of these firms cultivate a reputation for advising clients on complex subjects. That includes consulting in the field of renewable energy – often wind or solar electricity.

Deloitte publishes academic-style papers touting the virtues of renewable energy. Lazard published a widely quoted study purporting to show the unsubsidized cost of wind and solar energy. These studies pretend to be objective but are actually promotional material for their renewable energy clients. Of course, it would be unfair to expect these firms to pan their clients’ products. Neither is going to suggest that their client’s wind or solar is dumb energy any more than these firms' divisions that consult with the fossil fuel industry make a point of claiming that fossil fuels will destroy the earth’s climate.

Yet they want to appear to be serious advisors, not advertising agencies. If they publish studies that pretend to be serious but are actually filled with errors and unsubstantiated promotional statements, they will damage their reputations and mislead the public that reads such studies. These 'disguised advertising' studies are often used to lobby our legislators for more renewable energy subsidies and quotas. In my opinion, Deloitte and Lazard have compromised their reputations for money. Of course, cynics will say: "What do you expect?"

Lazard’s study of the unsubsidized cost of renewable energy is fake because they fail to show that costs of these fuels do not strip out two of the three principal subsidies of wind and solar. The three subsidies are direct federal subsidies, tax equity financing, and state quotas for renewable energy. By pretending that the second and third subsidies are not subsidies, they make wind and solar seem much less expensive than they really are. For a sophisticated consulting firm, this is serious error.

In Deloitte’s study, Global Renewable Energy Trends, the fakery is extensive. They claim that renewables (solar and wind) are reaching price and performance parity compared to traditional sources of electricity. The truth is that wind and solar are expensive and heavily subsidized. Compared to fossil fuels, either wind or solar is about seventy five percent, and more, subsidized.

The illustration below shows the cost of solar electricity from eleven independent power producers as purchased by NV Energy, the main Nevada utility.

Nevada, being a desert, has excellent sunshine. The blue bar shows the contract price of the electricity per megawatt hour. The orange bar is an implicit subsidy created by state quotas for renewable energy that result in long term power purchase agreements effectively reducing the required rate of return for a producer. The grey bar represents the federal subsidies, a direct subsidy and the so-called tax equity subsidy created by favorable depreciation for renewable energy plants. These costs are compared to the alternative of generating electricity by burning natural gas in existing plants. Natural gas electricity from existing plants costs, marginally, about $25 per megawatt hour. The existing plants cannot be closed because they are needed when the solar energy is not working, for example, in the evening, or when it is cloudy.

Deloitte outrageously claims that wind and solar help balance the electric grid. But it is widely known that wind and solar have destabilizing effects on the grid. How can power that is generated according to the vagaries of the wind and sun not create such difficulties? In California, where there is substantial solar, they have the duck curve problem. When the sun sets, fossil fuel plants have to ramp up output very rapidly, creating a curve resembling a duck’s back. The graph shows the output of the fossil fuel plants that back up the solar plants.

Fossil fuel output drops drastically in the middle of the day when solar output is strong and then must ramp rapidly as solar dies late in the day at the same time overall demand for electricity is peaking. Fossil fuel plants have difficulty in quickly ramping up output. The duck curve problem is worst in the spring when solar is strong but air conditioning load is still moderate. In mid-summer, air conditioning can absorb some of the excess solar generation.

Wind power is very volatile. The output of a wind turbine varies as the cube of the wind speed. A 10% percent change in wind speed will create a 30% change in power output.

In Texas, a state with massive wind power, large excursions of wind output can take place in a few hours. Fossil fuel backup plants have to scramble to keep the grid balanced. The Texas wind output can quickly shift by 5,000 megawatts, the amount of power that five large fossil fuel generating plants can produce.

Both wind and solar are seasonal. Solar power drops drastically in winter when the days are shorter and the sun is lower in the sky. Certain times of the year have more clouds than others. Wind power seasonality varies according to the local weather but is often present.

The crippling problem shared by wind and solar is intermittency. Deloitte claims that wind and solar become “more dispatchable” if storage is added. The idea of storage is that when wind or solar is strong, electricity can be stored in lithium batteries and then recovered when wind or solar is weak. 'Dispatchable' means that the grid operators can direct a plant to generate electricity. This can’t be done with wind and solar because sometimes wind or sun is missing. “More dispatchable,” like a little bit pregnant, is not a meaningful concept. In fact, wind and solar are not dispatched. The grid makes an effort to accommodate all the wind or solar electricity that arrives by adjusting the fossil fuel plants that provide backup power. Adding massive batteries to wind or solar installations is quite futile. Batteries big enough to smoothe out wind power for a year are extremely expensive and would multiply the cost of electricity by around a factor of ten. An added feature is that the batteries wear out after about five years.

Any legislator or reporter who is presented with a study written by a consulting firm with renewable energy clients should recognize that a conflict of interest is present. Institutions that make claims of expert knowledge and which are filled with highly educated experts are routinely corrupted by money. Universities and other scientific institutions often promote weak theories of catastrophe, such as global warming, incentivized by the resulting financial rewards. The Environmental Protection Agency, protecting a major program, promotes mitigation of radon (a naturally occurring radioactive gas) based on a weak theory that environmental radon causes lung cancer. Studies from such sources should be ignored. 

 

Norman Rogers writes often about energy. He has websites: nevadasolarscam.com and climateviews.com

Photo illustration by Monica Showalter, with use of Norman Rogers' DOE duck curve graph and public domain source.